What to watch in Nonfarm Payrolls?

Falling stock markets and slowing Chinese growth have sparked fresh worries about the global economy, but the U.S. continues to outperform the rest of the world. The Labor Department on Friday morning will release the most recent monthly employment report and another rock-solid gain of 200,000-plus is expected.

Nonfarm Payrolls measures the change in the number of people employed during the previous month, excluding the farming industry. Job creation is the foremost indicator of consumer spending, which accounts for the majority of economic activity. The release handled with absolute unweighted data, people working at two places respectively counted twice in the study. There are also seasonal workers.

Traders combine data with Nonfarm Payrolls Unemployment Rate (the percentage of unemployed to the total weight workforce). When Payrolls has a lower score than expected, and unemployment levels - higher, the scenario for the trend of the US economy is negative for USD. Conversely should be taken as bullish for the USD.

Most likely are many speculations, rumors and sudden market fluctuations that are already visible in these movements’ indexes.

There are concerns regarding the accuracy of this publication. The initial estimate of job creation in August is often inaccurate, sometimes dramatically so. Over the past five years, the government has revised up the number of jobs created in August by an average of 77,000. “Recent history shows that the first print on August payrolls generally surprises to the downside, only to be revised up substantially in subsequent months,” economists at Credit Suisse noted.

Release data usually have longer-term impact on markets than most economic indicators.In time around 15:30 expectations are high volatility, sudden movements and extended spreads.